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ARTICLE · 21 JULY 2023

SEC v. Ripple Labs: Securities Law Analysis Under Howey Applied On A Transaction-By-Transaction Basis

Fenwick
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Issuers cannot offer or sell securities without registering them with the SEC under Section 5 of the Securities Act of 1933 or finding a valid exemption from registration. XRP is the native..

United StatesTechnology
Jennifer Bretan
Jennifer Bretan
Michael Dicke
Michael Dicke
David Feder
David Feder
Rebecca Matsumura
Rebecca Matsumura
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Key Holdings

  1. In determining if the digital asset XRP is being offered or sold as an investment contract, the Ripple court applied the Howey test to each type of distribution alleged.
  2. Ripple's sales of XRP to fundraise from sophisticated counterparties pursuant to contracts were found to be unregistered securities transactions.
  3. Ripple's and its executives' sales of XRP on public exchanges in blind bid/ask transactions were not securities transactions.
  4. Distributions of XRP to employees and grantees, who did not pay Ripple for the XRP, were not securities offerings or sales.

It's the Transaction, Not the Token.

Issuers cannot offer or sell securities without registering them with the SEC under Section 5 of the Securities Act of 1933 or finding a valid exemption from registration. XRP is the native cryptocurrency of the XRP Ledger, a blockchain on which Ripple Labs builds enterprise cryptocurrency solutions. On December 22, 2020, the SEC sued Ripple and

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